Appointed as an Executor in an estate? Know your responsibilities.

Estate administration can be an involved processed, and must be done correctly. If you have been appointed as the Executor of an estate, there are a number of steps that you will need to follow.

Executor’s responsibilities

As an executor, your duties will include the following:

Arrange for the assets of the deceased to come under your control as the Executor.

Pay any debts of the deceased.

Secure all of the deceased’s assets and ensure that adequate insurance policies are in place.

Ascertain whether the deceased had an existing life policy.

Organise the taxation affairs of the deceased and their estate.

Keep proper records of all dealings with the estate.

Contact all beneficiaries and advise them of their interests in the Will.

Distribute the residue of the estate (after all expenses are paid), to the beneficiaries of the Will.

Applying for Probate or Letters of Administration

To carry out the terms of the will, you may have to apply for probate or letters of administration. These are the Supreme Court’s official recognition that the Will is legally valid, or where there is no Will (and you are the next of kin), that you are authorised to deal with the estate.

In order to obtain probate or letters of administration the executors must first advertise their intention to obtain probate or letters of administration in the local newspaper of the area where the deceased resided and in the Queensland Law Reporter, as well as notifying the Public Trustee.

Advertising ensures that anyone else holding a more recent Will been signed by the deceased can be identified. Any creditors of the estate will be also notified.

After the prescribed time limits have expired in relation to the advertising, an application is then made to the Supreme Court. This process takes approximately 8-12 weeks from the date of death.

How we can help

The advertising process can be quite involved, and it is essential that it be done correctly. The experienced Estate lawyers at Streten Masons Lawyers can assist you in the entire process of obtaining probate or letters of administration. Contact us if you have any questions or wish to arrange a consultation regarding estate administration.

The ‘L word’: Why litigation isn’t as scary as you think

There is a word we lawyers like to use often and typically with plenty of zeal – litigation. For the rest of the public, though, the idea of suing someone has been sensationalised by a lifetime of movies and television. The truth is that quite little is known about how the process actually works in Australia.

For some people the idea of litigation is exciting, for many it can be daunting, but I can assure you that the reality is somewhat anticlimactic.

The boring truth is that for most claims that are filed, no one will see the inside of a court room. This is a fact that seems to baffle most people as they prepare for their day in court, however, the reality is that most of the work is done via an exchange of letters and documents. The pen truly is mightier than the sword.

For those of you who have a legal problem and are feeling uneasy about taking the next step, or for those thinking ‘I don’t need to take it that far’, here is an overview of the process that may alleviate some of your uncertainty –

1. Filing a Claim

The first step is to file a Claim and Statement of Claim in the relevant court. This can be done online now. A Claim details what it is you are seeking from the defendant, and the Statement of Claim is merely an explanation of facts as to why you should have it. There is a lot of legal jargon and formalities that have to be adhered to, but in essence that is all it is.

2. Service

Once the Claim has been filed it will need to be served on the Defendant. If it is a person, they will need to be personally served and we will get a process server to do it. Companies are a lot easier to serve as we can simply mail the Claim to their registered office.

3. Default Judgment

Once a Defendant has been served they will have 28 days in which to file a Notice of Intention to Defend and a Defence. If they fail to do so you are able to make an Application for Default Judgment. If they do file a Defence, there are a number of procedures that are required to go through including holding a settlement conference where negotiations can take place to obtain the best commercial outcome.

4. Enforcement

In the movies the judge will rule in your favour set to an inspirational soundtrack, the defendant will storm out in an outrage, and that is the end of the story. The reality is that obtaining Judgment is really the beginning. Just because you might have Judgment against someone doesn’t mean that they will automatically pay it. There are a few options that we can take to enforce a Judgment against a Defendant and they vary in severity from obtaining an arrest warrant to filing a creditor’s petition for bankruptcy.

5. Costs

One of the biggest issues that people worry about is the cost. This is a valid concern as no one wants to spend more money while chasing down money. You are able to claim scale costs from the defendant once you have obtained Judgment. Scale costs are prescribed amounts for each of the steps that your lawyer may charge you for in a proceeding. You will be charged the scale cost for each of these steps, however there will also be non-scale steps that may need to be taken. At the end of the day the decision to pursue someone in the courts should always be a commercial one.

This is of course is a simplistic overview of the process, and while at times it can get a little more complicated, overall litigation is not as dramatic or scary as it seems.

How we can help

If you are concerned about an issue and are not sure whether or not you should pursue it, feel free to contact us to discuss your options further.

Employers beware – the festive season is here

Let us paint the usual scene of the annual business Christmas party: there’s the employee who drinks too much and is unwelcomely ill in an inconvenient location, the employee who loosens their tongue and wakes up feeling not just sore, but sorry, and the employee that reveals their most embarrassing moves on the dance floor.

Waking up in the morning after a staff Christmas party and feeling embarrassed for your behaviour is pretty common, and usually, it’s because of something harmless. This changes very quickly, however, when your (or one of your employee’s) behaviour constituted something a little more serious than a badly sung karaoke version of Bohemian Rhapsody.

Drink driving accidents, sexual harassment, injuries (both physical and emotional), and assaults have all amounted in various claims being successfully brought against employers for having breached their duty of care to their employees or by vicarious liability. Employers beware – the festive season has arrived!

Case Study

In the case of Lee v Smith & Ors [2007] FMCA 59, The Federal Magistrates Court held the Department of Defence liable for the actions of an employee sexually assaulting a fellow employee after a private function. The circumstances of this case involved employees attending a private dinner party where an employee was intoxicated and subsequently sexually assaulted by a fellow employee.

The employer in this case was held to be liable as the employee had previously made a sexual harassment complaint. The Court held the employer to be liable as the sexual assault occurred in connection with the employment of the assaulter and arose out of a work situation. The Court found that there was a sufficient connection to the workplace and employment of the employees to hold the employer liable for the employee’s injuries.

Something employers are often not aware of when it comes to staff functions is that even though they may be outside the workplace and outside of work hours, Courts have held that there is a significant casual connection between the function and the workplace. As a result of this link, if an employee brings a claim due to injury they have incurred or injury they have inflicted on another at a work function, there will be a strong case against the employer to be liable.

As an employer you may be able to reduce or minimise liability where a case is bought against you where it can be shown that you have taken all reasonable steps to reduce your liability. Unfortunately in the circumstances this is usually quite difficult for an employer to prove.

What can you do?

To make sure the night goes smoothly, we have seven tips for business owners out there when planning the annual Christmas event:

Monitor your employees’ behaviour.

Ensure that your event is held in a safe and secure location.

Provide transport and ensure that any employee drinking does not have their car available to them.

Monitor employee relationships and try to keep an eye out for any untoward advances that are not reciprocated.

Monitor alcohol consumption.

Ensure that all employees are aware that you consider this to be a work event, and that any improper behaviour will be answerable.

Determine with your insurance policy whether you would be covered for any liability arising out of damage caused at a work function.

It is the silly season, but as an employer it is your job to keep it safe. Follow these six tips and we’re sure your staff Christmas event will run smoothly and be enjoyed by all. Wishing all employers a happy and liability-free Christmas!

How we can help

For any question about employment, contracts, or litigation, contact us.

What you should know before taking on a new employee

When deciding to take on a new employee there are various considerations that need to be explored by you as the employer to ensure that you are complying with all of your obligations.

Modern Award

The first consideration that an employer will need to turn their mind to is whether a Modern Award is applicable to their business, and if so, which Modern Award. Modern Awards are applicable to national system employees. Predominately, private sector businesses are covered by the national system.

Modern Awards are contained on the Fair Work Australia website and there are tools to assist employers in determining which Modern Award is applicable to their industry. They contain employees’ minimum employment entitlements and standards; including minimum wages; penalty rates and circumstances where penalty rates are to apply; leave calculations; casual rates; and allowances.

Employers should ensure that they have carefully read through the provisions of the applicable Modern Award to ensure that they are aware of their responsibilities and obligations.

Position and classification

Once the correct Modern Award has been identified, the next consideration is to determine which classification your new employee falls under. The classification of the employee will determine the applicable minimum weekly wage entitlement for the employee.

Modern Awards contain classifications for employees based on:
• the position to be performed,
• the age of the employee,
• their skill level, and
• their qualifications.

You must closely examine the classifications contained within the Modern Award and compare the classifications to the circumstances of the employee to determine the wage classification for the employee.

Consequences of incorrect classification

Where employees have not been classified correctly and are not receiving the correct minimum wage level, allowances or penalty rates there can be various remedies sought against the employer.

Initially, it is usual for employees to raise their concerns with employers regarding their classification, minimum wage level or penalty rates. It is exceptionally important at this stage to document the employee’s concerns and review the applicable Modern Award to determine whether the concerns are valid. It is key to continue to communicate with the employee regarding these concerns and determine whether a resolution can be reached.

Where a resolution is not able to be reached, the employee can make a complaint to the Fair Work Commission to investigate. The Fair Work Ombudsmen may approach your business to conduct an investigation, which can include looking in to the classifications and wage levels of all of your employees. They may also engage in a negotiation between the employee and the employer to reach a resolution.

Finally, the employee may commence proceedings to recover the difference in wage levels.

How we can help

At Streten Masons Lawyers, we make ourselves available to our clients when they need business advice; we don’t charge for a simple phone call. Should you have any questions in relation to engaging employees, or problems with the employment relationship, please contact us to have a chat about how we can help your business.

5 reasons why updating your Will should be on this year’s list of resolutions

It is coming to the end of another busy year and is time to start planning the next one. Estate planning can be a daunting process for a lot of people as no one really wants to think about a time when they are not around to take care of their loved ones. That being said, here are 5 very good reasons why you should include ‘Making a Will’ on this year’s list of New Year’s resolutions.

1. Marriage

Have you recently gotten married? A little known fact about your Will is that when you get married, your Will is automatically revoked. One way of by-passing this legal nuance is to make sure that you make a note in your Will that the Will is made in contemplation of marrying your partner and that marriage to them is not to revoke the Will.

If you have recently gotten married or are planning to in the future, it is a good idea to ensure that your Will is properly drafted.

2. Divorce

Divorce has a similar effect to marriage except for the fact that the revocation only applies to gifts to be received by your former spouse. This means that anything you have left to your spouse in your Will no longer passes to them. It is a good idea to review your Will or make a new one if you have recently been through divorce proceedings.

3. Can your Executor be your Executor?

Has anything happened in recent times to your Executor or your relationship with them? The role of an Executor is very important as they are responsible for collecting in all of the assets and making sure that the beneficiaries receive their inheritance in the way that you want them too.

An Executor cannot act if they are under a legal incapacity, that is if they are in jail or have their capacity. A person under the age of 18 is also considered to not have legal capacity, so it is not advisable to include any young persons as your Executor.

4. Intestacy

In the event that you should pass away intestate (without a Will) the intestacy rules will apply to your estate. These rules are formulaic and may not represent the ideal estate distribution for your situation.

5. Peace of Mind

This is perhaps the most important reason to ensure that your Will is up date, as you will be able to sleep soundly knowing that your loved ones will be taken care of.

What happens to my debt when I die?

Creating a will helps to ensure that all of your assets are distributed the way want them to be. It is important to note, however, that your financial responsibilities at time of death affects whether everything is distributed according to your wishes.

Who is responsible for my debt if I die?

You are the only person responsible for your debt. The executor of your estate is responsible for distributing your assets in order to pay your debts, but is not liable themselves for paying them.

Your assets are distributed in a manner that will pay back any debts that you may have at the time of your death. This may affect any plans you have to leave specific amounts of money or assets to family members.

For example, if John owns a home worth $100,000 and has a mortgage over the home with $80,000.00 owing at the time of his death, his executor is obligated under the Succession Act1981 (Qld) to pay his debt before distributing any of his other assets under his will.

What if there is not enough to pay my debts?

If you do not have enough assets in your estate to repay all of the debts you owe then your estate may be declared bankrupt and a bankruptcy trustee may be appointed to finalise your debts.

What if I leave a house with a mortgage owing to a family member?

If you leave to someone a piece of property that has a registered mortgage over it with a part amount still owing, that person takes the property subject to that mortgage. This applies in any situation where there is a lien or charge over property.

For example, if Jenny owns a home worth $100,000.00 and still has $20,000.00 owing when she dies, the beneficiary of that piece of property under the Will can take ownership of the property. The beneficiary will obtain the property at the full value minus the money that is still outstanding as a debt to the bank.

Typically, the bank will call on the executor of the estate to repay the amount owing under the mortgage, or if there are not enough funds in your estate to pay the debt, the property will be sold with the residue falling part of your estate.

What about my superannuation fund?

Your superannuation fund is slightly different to your normal monetary or tangible assets.

A superannuation fund is not considered as part of your estate automatically. If you have nominated a beneficiary (a ‘binding death nomination’), the trustee of your superannuation fund has the power to distribute any money in the fund according to your direct instructions. This is called a Superannuation Fund Death Benefit, and the beneficiary is solely entitled to the money held within it, regardless of whether your estate has any debts owing.

If you do not nominate a direct beneficiary, the trustee of your superannuation fund will determine how the money is to be paid. Typically the money is paid in to your estate for your executor to distribute. In this situation the money must first be distributed so as to pay off outstanding debts.

How can we help

The team at Streten Masons Lawyers specialises in helping people clients with Wills and Estates. To find out how we can help you, make an enquiry today.

Debt Recovery: When an individual is declared bankrupt

At Streten Masons Lawyers we use our debt collection experience to your advantage. How? We deliver a letter of demand to the debtor which includes a period of time in which the debt is payable, which in our experience this maximises your chance of recovery. If payment is not made as requested in the letter of demand, Court proceedings can be immediately filed.

In the event of a bankruptcy…

If an individual is declared bankrupt by the Courts, a Trustee is appointed to take control of the insolvent person’s estate in order to turn the assets into cash to distribute equally among unsecured creditors (those who do not hold security for payment of the debt).

Secured creditors may commence debt recovery by disposing of the asset securing the loan (e.g. a bank would do this if mortgage payments are not made on a house). Bankruptcy proceedings are handled in either the Federal Court or the Federal Magistrates Court, depending on the complexity.

When a company is declared insolvent the Court has the power to ‘wind it up’ and appoint a Liquidator, whose responsibility is to turn the assets into cash and distribute it in the order set out in the Corporations Act.

The creditor and the liquidator firstly recover their costs, followed by certain entitlements to employees. The balance is distributed among unsecured creditors. Winding up proceedings are handled in either the Supreme Court or the Federal Court.

Debt recovery in 9 steps

Cash flow is the lifeblood of any business. Often businesses can be crippled when large sums of money are owed and have not been recovered. If payment is not made as requested in the letter of demand, Court proceedings can be immediately filed.

9 steps in the debt recovery process

The defendant must file a Notice of Intention to Defend and Defence within 28 days. If they do not the plaintiff may apply for default judgment.

The defendant may file a Counter Claim to the plaintiff’s Claim and Statement of Claim when filing their Notice of Intention to Defend and Defence.

The plaintiff may then file a Reply to the Defence of the Defendant within 14 days.

If the Defendant filed a Counter Claim the Plaintiff may file an Answer to the Counter Claim when filing their Reply to the Defendant’s Defence.

If the Plaintiff files an Answer to a Counter Claim the Defendant may then file a Reply to that Defence within 14 days.

Both the Plaintiff and Defendant must then disclose to the Court all of the documents and evidence that they intend to reply upon when the matter proceeds to Trial.

The matter will then be set down for a Directions Hearing that both parties must attend (this is generally only in Magistrates Court).

If the matter is not resolved at a Directions Hearing the matter will be set down for Trial.

Once the matter is heard at Trial a decision (judgement) will be reached.

How we can help

Once Judgment is entered, a number of procedures are available to enforce it. At Streten Masons Lawyers, our debt recovery lawyers can assist you with:

Writs (seizure of goods to sell in order to repay the debt)

Examination Summons (requiring the debtor to attend Court to display how they will satisfy the Judgement) and

Garnishees

Orders (whereby the Court can order a third party to pay money to a creditor instead of a debtor).

Filing an Originating Process. If the Court is satisfied that the company is trading insolvent, it can then appoint a liquidator.

We use our debt collection experience to your advantage. Contact us today to discuss how we can help you in the area of debt recovery.

“CPA Australia reports that 32% of ASX listed companies are confronting the risk of financial catastrophe with one of the main issues being negative cash flow – That’s more than during the global financial crisis.”

How will your business survive these difficult times?

Do you use the Personal Property Securities Register (“PPSR”) to secure your interest in goods sold?

Are you ready for the new Building & Construction Industry Security of Payments Act?

Are you aware that a breach of the Privacy Act could cost your business up to $1.7 million?

New BCIPA changes passed through parliament – 11th September

Last month amendments to the Building and Construction Industry Payments Bill 2014 were passed through the Queensland Parliament. Further to our article from August, there are some new conditions of which Building and Construction industry professionals should take note. The new Act was expected to have come in to effect earlier this month, however following these recent amendments to the original Bill, we may be waiting a little longer. Here are the key changes:

Contracts entered in to before the commencement of the Act– under the original draft of the Act, these contracts were to be included in the new procedure laid out in the new Act. The most recent revisions, however, now provide that only contracts which are entered in to after the date on which the Act commences will be affected by the new regulations.

QBCC’s role in the adjudication process-The Queensland Building and Construction Commission will be adopting an appointing role which will still occur as soon as the Act comes in to effect. The new Act also empower the QBCC to establish a set of principles for the appointment and ranking of adjudicators.

Complex claims – Defining a complex claim has become much simpler under the newest revision of the Act, as now any claim over $750 000will automatically become a complex claim. There are no longer any other conditions which may result in a complex claim, and it is not necessary to specify in the contract whether the claim is complex.

Time frames – The original proposed amendments have survived the revision of the bill unscathed, and remain as follows:

Time to make a payment claim is being reduced from 12 to 6 months from the date that the works have been completed, however, a different time period can be agreed upon in your contract. If no time period is specified in the contract, the 6 month period will apply.

If you are sending out the final payment claim, the time to serve the payment claim will be the later of: the period agreed in the contract, 6 months from the completion of the works, or fi28 days from the end of the defects liability (under the contract).

Second chances for payment schedules– if the respondent gives a payment schedule in response to a payment claim, the claimant must issue a second chance for payment within 20 days of the due date for the payment. The respondent will then have 5 extra business days to respond to the payment. This can become an issue if the claimant fails to issue the second chance within the 20-day limit, as they will become unable to apply for adjudication or judgement, and may lose the payment.

Adjudication process – significant changes have been made the adjudication process. Should you wish to enquire further about your options in respect of adjudication, please contact our office.

Still confused? Here is a visual summary of the new BCIPA process as of 11th September 2014 (yet to come in to effect):